New Suits For Nude Dancers

If nothing else, the Kearny Mesa strip joint called Cheetahs has had a colorful family history. For 12 years, according to police records, it was owned by Jack and Michael Galardi. Jack was a hardened bar owner out of Las Vegas by way of Trinidad, Colorado, and Long Beach, California, who had built a coast-to-coast strip-club empire. Michael was Galardi's angel-faced adopted son who had grown up a child of privilege in a wealthy Vegas suburb.

On October 21, 2002, Michael filed an application with the city to take over Cheetahs from his father. In those heady days, the club's parking lot was crammed with flashy muscle cars and expensive SUVs, and the nude girls inside were famous for their up-close-and-personal lap dances.

Competitors began complaining that Michael had an in with the cops and an unhealthy influence over the city council and other city officials, who seemingly looked the other way as his girls flaunted their violations of the city's so-called six-foot rule, requiring nude dancers to maintain that distance from their customers.

Then came the May 14, 2003, raid on city hall, during which the FBI swept down on the well-appointed city hall suites of councilmen Michael Zucchet, Ralph Inzunza, and Charles Lewis, hauling off computers, hundreds of files, memos, and other evidence. It turned out the council offices, along with the watering holes frequented by the councilmen, had been bugged for years.

On August 28, 2003, a federal grand jury indicted the three councilmen for wire fraud and conspiracy to commit wire fraud; Zucchet and Inzunza were also indicted for extortion. Michael Galardi, his lobbyist Lance Malone, and club employee John D'Intino were indicted for wire fraud, conspiracy to commit wire fraud, extortion, and interstate travel in aid of racketeering. On September 8, 2003, Michael Galardi pled guilty to one count of wire fraud and agreed to testify against the other five defendants.

The next month Galardi entered a guilty plea in Las Vegas federal court in a similar case against him there for bribing county commissioners. With Michael destined to serve time in federal prison, it was widely expected that he would be forced to give up Cheetahs and the Galardi family would be banished from San Diego once and for all. But it hasn't worked out that way.

These days Cheetahs is still packing them in. But police insist everything on the inside is on the up-and-up and the girls are staying a safe distance from the clients. The club is now run by a Nevada corporation by the name of Red Eyed Jack's Sports Bar, Inc. Its president, Suzanne Coe, says she owns all but 5 percent of the company. The rest? She says it belongs to Jack Galardi, though she is currently negotiating to acquire his remaining interest.

Coe says she has never owned a strip club before, but she is not entirely new to the business. Coe, a lawyer from South Carolina who represented a young woman in her suit to obtain admission to the male-only Citadel military college in 1995, has been Jack Galardi's attorney in a string of legal and zoning battles against cities that have tried to shut him down. This summer she filed suit in federal court to stop Clark County officials from taking away the liquor license for Jack Galardi's Las Vegas Leopard Lounge. That case is pending.

The situation in San Diego is different. Unlike topless clubs, which can serve drinks, Cheetahs dancers appear in the altogether, and the club is barred by state liquor laws from selling booze. Under the city's adult-entertainment law, all-nude establishments including Cheetahs must apply for a license once a year. The police vice squad is supposed to check out owners, making sure they don't have a criminal background.

On November 20, 2003, just weeks after Michael Galardi entered his guilty pleas, San Diego police revoked Galardi's adult-entertainment license, citing admissions Galardi had made in his plea agreements. Galardi's attorney, Roger Jon Diamond, appealed the revocation. As the appeal made its way through the courts, Michael Galardi continued to own Cheetahs.

Under a procedure spelled out by city law, a hearing on the merits of Galardi's appeal was held before administrative law judge Stephen Hjelt on February 15, 2005.

During the hearing, recently retired vice lieutenant Robert Hurt was called to the stand and testified that he had pulled the permit because of Galardi's admission of guilt. Diamond got Hurt to admit that the license had been revoked in large part due to Galardi's Las Vegas confession, which Hurt deemed more serious than those Galardi had made in the San Diego case, but that didn't seem to make much of an impression on the judge.

Hjelt handed down his ruling on April 14, 2005. "The Police Chief acted on the basis of sufficient credible evidence in denying the permit renewal application," wrote Hjelt. He cited Galardi's plea agreement with federal prosecutors, in which the strip-club owner admitted to illegally funneling campaign contributions and other gratuities to city council members in San Diego and county supervisors in Las Vegas.

"Galardi and his middlemen paid money, property, and services to certain public officials, the sum of which over time amounted to a value between $200,000 and $400,000, which payments were not otherwise due and owing to the public officials.

"The record is clear that Mr. Galardi has signed two plea agreements (one in San Diego and one in Las Vegas) and awaits sentencing in both cases," said Hjelt. "Nude entertainment clubs are regulated to address a variety of problems which are associated with the business, not just sexual misconduct."

Hjelt noted that by Galardi's own admission, the strip-club magnate "had bribed an undercover officer to obtain advance warnings of vice raids." In addition, Galardi "conspired to illegally advance the repeal of one of the regulations pertaining to nude entertainment, the no-touch rule.

"He conspired with his manager at Cheetahs to corrupt City officials and deceive the public for the benefit of Cheetahs. One is hard-pressed to find a more compelling showing of manifesting an inability to perform the duties of a permittee.

"The police chief had numerous alternatives in dealing with [Galardi]. The option of non-renewal was by far the most serious. Unquestionably, this will put appellant out of business. However, here the evidence of serious wrongdoing is compelling and the actions engaged in by Galardi are inconsistent with holding such a permit."

After the ruling, Galardi's attorney, Roger Jon Diamond, said he would lodge an appeal of the decision with the Superior Court, as permitted under the code.

Then, on June 2, Suzanne Coe, Jack Galardi's attorney, filed an application with the city on behalf of Red Eyed Jack's Sports Bar, Inc., a Nevada corporation, for an adult-entertainment permit to operate Cheetahs.

According to articles of incorporation submitted with Coe's application, Red Eyed Jack's had been formed on June 2, 2002. Its first board of directors consisted of just one individual: 75-year-old Jack E. Galardi. In her June 2005 adult-entertainment application, Coe listed herself as president, vice president, secretary, and treasurer of the corporation.

The application form says that "each owner, corporate officer or partner is deemed an applicant and each must provide" detailed information regarding their address and background. Coe listed herself as both owner and corporate officer. No other owners were named.

On June 30, 2005, the San Diego Police Department turned down her bid to run Cheetahs.

"This letter is to inform you that your application is being denied," wrote police code compliance supervisor Cinty Sergott. Sergott went on to maintain that the lease for Cheetahs cited by Coe in her application "is not valid."

In her letter, Sergott cited a technicality, claiming that "a representative of the property owners, Mr. and Mrs. Philip R. Taylor, has advised the lease cannot be transferred without their authorization; thus making the transfer improper."

In a letter dated July 14, Coe fired back, refuting the city's allegation that the club's lease was not valid and alleging that San Diego regulators had unfairly tried to harass her. "I had to fly in to San Diego to apply for my license twice. The first time, after the licensing official disappeared for a very long period in the back area, I was informed, right before the office was to close for the day, that my entire packet could not be accepted because my bill of sale was not notarized (which is NOT a requirement, in fact a bill of sale is not even required under your Code).

"I was told that I could not Federal Express it in the next day or do anything except come back personally and submit it. When I arrived the second time, I met further resistance and had to become a bit abrasive to have these accepted.

"I know of no provision that allows the City of San Diego to make legal determinations regarding commercial leases and rights of commercial lessees in conjunction with its consideration of licensing adult speech."

Coe went on to argue that, in any case, the lease between Red Eyed Jack's and the Taylor couple was valid: "Since October 9, 1989 (the date of the death of the originally named lessee, who was an original partner) the named assignee of the lease has been Jack Galardi, who is a shareholder of my corporation." Coe appealed the ruling, and like Michael Galardi's earlier appeal, it began making its way through the city.

On August 8, 2005, Coe wrote to the city staffer in charge of scheduling appeal hearings to confirm that her appeal was being processed. "I received a message today whereby you called my office and relayed that the police department was agreeable to allowing Cheetahs to continue under the 'status quo' until further proceedings." She sent a copy of the letter to Michael Galardi. Meanwhile, Cheetahs continued to operate under Michael Galardi's old license.

Then, on January 27 of this year, with Coe's appeal pending, the city and Coe reached a settlement agreement. Under its terms, Michael Galardi agreed to end his appeal of the revocation of his license to operate Cheetahs. Coe agreed to drop her appeal of the police department's denial of her application to operate the club; the police in turn withdrew their denial letter and agreed to grant her a permit to run the strip club. Coe insists that her plan to buy out Jack Galardi's remaining interest means that Galardi family ownership of the club has come to an end.

And what about the six-foot rule? If it is "reasonably" administered by police, Coe says she can live with it. If not, or if it is cited unfairly to harass the girls in their work, there is always the possibility of a federal lawsuit.